Wednesday, July 10th, 2019

Virgin Galactic to go public after merger with SCH

In a move that will bring in substantial investment at an optimum time, Sir Richard Branson’s Virgin Galactic is to merge with Social Capital Hedosophia Holdings Corp (SCH), a special purpose acquisitions company.

SCH will hold a 49% stake in the company while Virgin Galactic will retain a 51% stake and the new company plans a stock market listing for the end of the year, making it the first space tourism company to turn to public markets for funding. The company is expected to have a pro forma enterprise value of US$1.5 billion and the majority of investment capital raised will be used to keep the Virgin Galactic program ahead of competitors such as Jeff Bezos’ Blue Origin and Elon Musk’s SpaceX.

According to Virgin Galactic, Chamath Palihapitiya, founder and CEO of Social Capital Hedosophia has agreed to invest an additional US$100 million at US$10.00 per share at completion of the transaction. Palihapitiya will also become the new company chairman, with George T. Whitesides remaining as CEO. The selling equity owners of Virgin Galactic will receive US$1.3 billion in total consideration, inclusive of US$1.0 billion of common stock of the combined company valued at US$10.00 per share and up to US$300 million in cash consideration.

In February this year Virgin Galactic flew its first ‘test passenger’ to the edge of space and to date has over 600 customer reservations, including the likes of Leonardo DiCaprio and Justin Bieber, who have paid deposits totaling approximately US$80 million and representing US$120 million in potential revenue for the US$250,000 90-minute flight. The merger is expected to be completed during the second half of 2019, subject to approval by SCH’s shareholders and other customary closing conditions.

Jet Parts Engineering

France to introduce eco-tax on airline tickets

France wants to levy an environmental tax on airline tickets from the beginning of 2020. The eco-tax will be between €1.50 and €18.00, depending on the type of ticket, said French Transport Minister Élisabeth Borne on Tuesday. The tax will apply to all flights departing from France. There are exceptions for connecting flights as well as flights to the French Mediterranean island of Corsica and French overseas territories.

All other domestic and intra-European flights will have a levy of €1.50, according to the Minister for Economy Class Tickets. The environmental tax for a business-class ticket will be €9.00. Tickets to destinations outside Europe will be taxed at €3.00 in economy class and €18.00 euros in business class, Borne also explained. The state wants to collect up to €182 million annually. The money would then be invested in more-environmentally friendly infrastructures, in particular the rail system.

The pressure on airline shares increased with the news. Lufthansa shares fell by 2.7 percent to €14.81 . The shares of other airlines such as Air France-KLM, IAG, Ryanair and EasyJet also fell on
Tuesday afternoon. (€1.00 = US$1.12 at time of publication.)

AerCap leased, purchased and sold 82 aircraft in the second quarter 2019

AerCap Holdings N.V. has published its major business transactions during the second quarter 2019: AerCap has signed lease agreements for 48 aircraft, including 4 widebody aircraft and 44 narrowbody aircraft and has purchased 11 aircraft, including 6 Airbus A320neo Family aircraft, 4 Boeing 787-9s and 1 Embraer E2.

AerCap has executed sale transactions for 23 aircraft, including 9 Airbus A320 Family aircraft, 3 Airbus A330s, 4 Boeing 737NGs, 1 Boeing 737 Classic, 1 Boeing 777-200ER, 1 Boeing 777-300, 2 Boeing 747s and 1 Boeing 767 from AerCap’s owned portfolio and 1 Airbus A300 from AerCap’s managed portfolio.

The company has signed financing transactions for US$1.5 billion in the second quarter 2019.


Lufthansa expands A380 fleet in Munich

Starting in Summer 2020, Lufthansa will be taking off from Munich with two additional Airbus A380 aircraft. This will increase the Munich A380 fleet to a total of seven aircraft, with the remaining seven stationed in Frankfurt. Soon, Lufthansa passengers can experience the world’s largest commercial aircraft on five routes from Munich, including the addition of two new destinations served by the double decker. For the first time, Lufthansa will be operating the A380 to Boston and serving San Francisco with an A380 year-round. In addition to these routes, Los Angeles, Beijing and Shanghai are also on Munich’s A380 flight schedule for summer 2020.

Currently, Lufthansa operates the Airbus A380 from Munich to Los Angeles, Beijing and Hong Kong. In the upcoming 2019/2020 Winter Schedule, the giant Airbus will operate to San Francisco, Miami and Hong Kong (until December 2019) as well as Shanghai (as of January 2020).

AAR awarded four-year MRO contract with Royal Netherlands Air Force

Global aerospace and defense aftermarket solutions company AAR, has been awarded a four-year contract by the Royal Netherlands Air Force (RNLAF) to perform maintenance, repair and overhaul of the Chinook APU for Logistics Centre Woensdrecht (LCW).

AAR will service the Chinook fleet in its Component Repair facility in Amsterdam, where AAR has been supporting European Participating Air Forces (EPAF) for over 30 years as a prime provider or subcontractor for repair management, component maintenance, supply chain and depot services.

Bombardier secures first order for Global 5500 aircraft

Bombardier has secured the first order for a Global 5500 aircraft to be operated from the West Coast of the United States. This transaction is valued at US$46 million, according to current list prices.

“The Global5500 aircraft offers the ultimate in performance, comfort, reliability and signature smooth ride,” said Peter Likoray, Senior Vice President, Worldwide Sales and Marketing, Bombardier Business Aircraft. “It is ideally suited to meet the needs of our customers on the West Coast, connecting Los Angeles to London, Sao Paulo or Moscow (under certain operating conditions). This order is a resounding example of our newest Global aircraft’s undeniable impact on the world of business aviation.”


SkyWorks releases 2nd quarter 2019 activities

SkyWorks Holdings has released transactions and activities performed during the second quarter of 2019 for its Leasing & Asset Management Group.

SkyWorks arranged the sale of two ex-China Eastern Airlines A330-300s (s/n 777 and 781) on behalf of Bellinger Asset Management as well as lease extensions for three A320s on-lease to American Airlines on behalf of a US investor.

The company completed its assignment for the sale of four A300F4-605R aircraft on behalf of one of its portfolio clients and was retained by a US investor to arrange a portfolio sale of five A320s on-lease to United.

SkyWorks was engaged by RESIDCO to arrange the sale of two 737-700s on-lease to WestJet and was retained by a major US financial institution to remarket three 737-700s and one 737-800 coming off-lease in 2019/2020.

Azores Airlines takes delivery of first of three A321LRs

Azores Airlines has taken delivery of its first of three A321LRs to be leased from Air Lease Corporation (ALC), becoming the latest operator of the long-range single-aisle aircraft.

Powered by CFM International’s LEAP-1A engines, the Azores Airlines’ A321LR comprises 190 seats in a two-class configuration (16 Business class seats and 174 seats in Economy) offering premium wide-body comfort in a single-aisle aircraft cabin and with single-aisle operating costs. With this new A321LR, the Portuguese operator will continue its strategy of growth and network expansion to European destinations as well as transatlantic routes between the Azores and North America.

Skyworld Aviation facilitates ERJ 145 sale to BAE Systems (Corporate Air Travel)

Skyworld Aviation has announced the sale of an ERJ 145 to BAE Systems (Corporate Air Travel). The aircraft, serial number 145588, was originally delivered new to Swiss and then went on to operate with AeroMexico Connect for 11 years. The aircraft was later parked and sold to a third party aircraft owner, based in the U.S.

Skyworld Aviation worked closely with BAE Systems to manage a Return to Service work package which also included a full records review and base maintenance. Skyworld Aviation contracted Charles Taylor Aviation Asset Management to act for the Seller, whilst BAE contracted FlyerTech as its CAMO. The aircraft was successfully brought back into EASA certification and arrived at East Midlands Airport on 27th June 2019 where it was painted by Airbourne Colours.

Component Control

Astronics to sell Airfield Lighting product line

Astronics Corporation has signed a definitive agreement under which Hughey & Phillips, LLC, will acquire the Airfield Lighting product line from Astronics. The transaction, subject to customary closing conditions and adjustments, is expected to close on or before July 12, 2019.

Peter J. Gundermann, Chairman, President and Chief Executive Officer, commented, “As we continue to build and grow our business, the Airfield Lighting product line comprised less than 1% of our 2018 revenue and no longer fits within our core offerings. This transaction allows us to focus our efforts and drive more profitable growth across our organization.”

Hughey and Phillips (H&P) is one member of a conglomerate of companies serving the aviation, transportation, security and medical markets from its headquarters in Urbana, Ohio. H&P is a global leader in obstruction and airport lighting products and has been serving the safety needs of the transportation industry since the 1930s.


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